SunPower One-Time Early Buyout Option (E.B.O.)

[Ian S]

My, how time flies. I just received a letter from SunPower leasing informing me that the date of my E.B.O. is April 7, 2018. I have to give them 60 days written notice if I want to take advantage of the offer so that means sometime in the next month or so. Decisions, decisions. Originally, I though I'd just do the buyout but it's more complicated now by our plans for the next couple of years.

A little background for the unfamiliar. I started looking into solar in 2011 and got my first quotes in July of that year. At that time, outright purchase or monthly leasing was the typical way forward but there was also a "prepaid lease" option that really intrigued me as it seemed to offer most of the benefits of outright purchase along with what amounted to a 20 year warranty on everything. Furthermore, because of the way the leasing companies operated, they received tax benefits that an individual was not entitled to. Consequently, pricing of a prepaid lease could at times look too good to be true. After getting quotes from SolarCity, Sungevity, and Sunrun, a friend who already installed solar suggested I contact her installer, Perfect Power. I did and got what appeared to be a reasonable quote for their in-house prepaid lease. But as I was mulling things over, the Perfect Power rep contacted me with a brand new offer from SunPower for their prepaid lease and it really took my breath away: one upfront payment of $6,728.89 for a 6.9 kW Sunpower system installed. That was far better than any other quote I had got. SunPower would receive all the rebates and tax benefits but it was still a great price for what at the time was a $30K system.

In poring over the lease documentation, one of the things put in writing was a table of buyout values for every year of the lease so that the lessee would know the cost to buy out the lease if they were to sell the home before the lease was up. Fair enough but also included was a one-time option to buy out the lease even if you weren't selling the house. That date was exactly 6.5 years from the date of the lease signing which in my case was October 7, 2011. Buyout cost: $843.73. A no brainer right? Except a wrinkle is that we now plan to sell our home in 2019 and move out of the Phoenix area. In 2019 when we sell, the buyout would only be a few hundred $$ more and that would provide the buyer with the option to just continue with the existing lease - no cost to them - or do the buyout and have them own the system outright. Some buyers may like the idea of the full coverage afforded by the lease over the remainder of the 20 year period, others may prefer to own outright.

SunPower also mentions that the buyout option does not include and sales taxes or other fees or charges imposed on me or SunPower. I'd have to pay them. Also I've always wondered if there would be any income tax consequences to the transaction. I'd be really interested if anyone knows of a SunPower lessee who has gone through the process and if there were any surprises.

Thoughts?

[cebury]

I think you have monitored the board enough to know that SP prepaid lease program with early buyout was a rare deal they offered that ended 2011 and wasnt offered again. We never saw leases like that again from any vendor. They were here a short time and also I suspect they suffered from a lowball mistrust that few actually bought them. Other than you, I did not see or hear anyone here get one. Only one SP vendor locally was even aware of the program. I canceled mine before signing due to move from family presssures.

Wish you luck finding someone.

My 02 is do the buyout at your first chance, so there is no mention of any lease when you go to sell the house. Public knowledge of the hassle of other leases like SC, is finally starting to spread where I live in CA. Hassle with the sale, refi, purchase etc. despite that SC still hits the unexpecting here and there. Free and clear is the best way to to advertise those panels imho.

Good luck friend.

[J.P.M.]

Ian: Nice to hear from you. Merry Christmas.

Last week I was thinking about the sweet deal lease you got and thinking it was about time to pony up the paultry sum they want for a buyout.

PAY'EM OFF AND DON'T LOOK BACK. THE BUYOUT IS PEANUTS ! WHAT ARE YOU THINKING ? THE WAY THINGS ARE GOING, NO ONE MAY WANT OR CARE ABOUT PV IN PHOENIX BY 2019 ANYWAY, MUCH LESS SOME LEASE.

As for full coverage - we both, and as anyone with an informed opinion knows, the systems take little/no maintenance and the way it's looking, that good track record is likely to continue.

With most respectful and best wishes for a healthy and prosperous New year with $843.73 less cash in it after the buyout,

J.P.M.

[Ian S]

Buyout update: Well, in January I sent in my letter of intent to exercise my buyout option on the buyout date of April 7, 2018. That date is creeping closer and I had heard nothing in response. A couple of weeks ago, I called the SunPower leasing number and waited on hold for 20 minutes before leaving my number for a callback. Still no callback or response so today I decided to call and just stay on the line until someone answered. This time, after about 15 minutes, I was unceremoniously disconnected. Undeterred, I immediately called back prepared to spend as long as it took to get this resolved. This time the wait was only about 10 minutes and I was able to talk to a live person. Apparently the email address they had for me was one that had been invalid for several years and they had sent the info there. Odd since their EBO notice had been sent by snail mail in December so I was expecting the additional documents to come this way too. So, take note that you should make sure your leasing company - especially if it's SunPower - has updated contact info for you including email! This time the rep waited on the phone line to make sure I got the emailed info and yes, I did. The only surprise I see is an EBO processing fee of $250.00 added to the buyout cost. I don't recall seeing anything like that in the lease docs but it's probably there somewhere so be forewarned if you are looking at any kind of buyout option. Why they didn't just bake that into the buyout price, I'll never know.

Our plans still include a move late next year. The inverter will still have about 30 months left on its warranty and the panels will be warranted until 2037. The system will benefit from grandfathering of net metering until 2032. By the time we sell the home, we'll have electric utility savings of ~160% of the total amount invested in the system. Not too shabby considering the system will only have been running for 7.5 years. I'm not expecting the panels to add anything to the home value but I really don't expect any negative impact either.

[SunEagle]

Buyout update: Well, in January I sent in my letter of intent to exercise my buyout option on the buyout date of April 7, 2018. That date is creeping closer and I had heard nothing in response. A couple of weeks ago, I called the SunPower leasing number and waited on hold for 20 minutes before leaving my number for a callback. Still no callback or response so today I decided to call and just stay on the line until someone answered. This time, after about 15 minutes, I was unceremoniously disconnected. Undeterred, I immediately called back prepared to spend as long as it took to get this resolved. This time the wait was only about 10 minutes and I was able to talk to a live person. Apparently the email address they had for me was one that had been invalid for several years and they had sent the info there. Odd since their EBO notice had been sent by snail mail in December so I was expecting the additional documents to come this way too. So, take note that you should make sure your leasing company - especially if it's SunPower - has updated contact info for you including email! This time the rep waited on the phone line to make sure I got the emailed info and yes, I did. The only surprise I see is an EBO processing fee of $250.00 added to the buyout cost. I don't recall seeing anything like that in the lease docs but it's probably there somewhere so be forewarned if you are looking at any kind of buyout option. Why they didn't just bake that into the buyout price, I'll never know.

Our plans still include a move late next year. The inverter will still have about 30 months left on its warranty and the panels will be warranted until 2037. The system will benefit from grandfathering of net metering until 2032. By the time we sell the home, we'll have electric utility savings of ~160% of the total amount invested in the system. Not too shabby considering the system will only have been running for 7.5 years. I'm not expecting the panels to add anything to the home value but I really don't expect any negative impact either.

I have found other companies had added "fees" onto a service that use to be free.

My guess is that cost of labor has gone up and they are trying to recoup some of the time spent by their employees to process the request.

[J.P.M.]

Buyout update: Well, in January I sent in my letter of intent to exercise my buyout option on the buyout date of April 7, 2018. That date is creeping closer and I had heard nothing in response. A couple of weeks ago, I called the SunPower leasing number and waited on hold for 20 minutes before leaving my number for a callback. Still no callback or response so today I decided to call and just stay on the line until someone answered. This time, after about 15 minutes, I was unceremoniously disconnected. Undeterred, I immediately called back prepared to spend as long as it took to get this resolved. This time the wait was only about 10 minutes and I was able to talk to a live person. Apparently the email address they had for me was one that had been invalid for several years and they had sent the info there. Odd since their EBO notice had been sent by snail mail in December so I was expecting the additional documents to come this way too. So, take note that you should make sure your leasing company - especially if it's SunPower - has updated contact info for you including email! This time the rep waited on the phone line to make sure I got the emailed info and yes, I did. The only surprise I see is an EBO processing fee of $250.00 added to the buyout cost. I don't recall seeing anything like that in the lease docs but it's probably there somewhere so be forewarned if you are looking at any kind of buyout option. Why they didn't just bake that into the buyout price, I'll never know.

Our plans still include a move late next year. The inverter will still have about 30 months left on its warranty and the panels will be warranted until 2037. The system will benefit from grandfathering of net metering until 2032. By the time we sell the home, we'll have electric utility savings of ~160% of the total amount invested in the system. Not too shabby considering the system will only have been running for 7.5 years. I'm not expecting the panels to add anything to the home value but I really don't expect any negative impact either.

Ian:

Thanx for the info/update.

Probably doesn't make it an easier pill to swallow but the wait time/hangup/screwup doesn't surprise me one bit. Been there, done that in comm. attempts with Sunpower. Almost as much B.S there as in their advertising. If they spent as much time and effort on professional customer service as they do on their advertising things would be better. But that's off topic and I digress.

The $250 processing fee you write of seems like more B.S. but not a surprise to me, nor to you either for that matter I bet. Even with that however, I'm still of the opinion you must have had a horseshoe in you butt the day you signed a contract with that lease buyout on those terms in it. You should have bought a lottery ticket or went to Vegas that day.

Good luck.

[J.P.M.]

I have found other companies had added "fees" onto a service that use to be free.

My guess is that cost of labor has gone up and they are trying to recoup some of the time spent by their employees to process the request.

Maybe. Maybe not. I suspect they just get longer cattle prods for all the folks in the Philippines that do all their paperwork and cust. interface. Call them to get a feel for what I'm writing about. Sounds like they have a boiler room sweat shop operation every time I call them with pre scripted responses for every question I ask read by helium sucking 10 year olds.

[Ian S]

Maybe. Maybe not. I suspect they just get longer cattle prods for all the folks in the Philippines that do all their paperwork and cust. interface. Call them to get a feel for what I'm writing about. Sounds like they have a boiler room sweat shop operation every time I call them with pre scripted responses for every question I ask read by helium sucking 10 year olds.

It may make a difference that this was SunPower Capital. The woman I spoke with had no accent and was able to quickly determine what went wrong and fixed it while I remained on the phone. The problem was the length of time I spent waiting for a customer rep and the fact that they did not return my call from a couple of weeks ago. I will accept responsibility for not providing them with an updated email address although TBH, I figured they had the correct one (been sending monthly solar production reports after all.) The moral of the story is never to assume anything when dealing with a solar leasing company or any company for that matter.

As to the processing fee, I can see nothing in the lease I signed that provides for that.

[Judy]

I have same sun power prepaid lease. Now fast approaching date to send $ for early buyout. Concern for costs for monitoring or new inverter n other services n parts needed over next 15 years. Don

[Judy]

If I buyout now I have 15 years maintenance n parts to pay as needed. Lease has production guarantee so they fix n maintain n replace inverter I think.
Concerned with replacement of inverter. What is cost if I

[Judy]

I have same dilemma. Concerned with replacement of inverter. What is cost if I

[Ian S]

We're moving in a year so the question becomes what's more saleable, solar owned outright with existing warranties intact or some kind of solar lease. Logically, continuing with the prepaid lease makes some sense but folks get scared when they hear "lease" and I think that's a problem. Yes the inverter is likely going to fail at some point but cost should only be a few thousand to replace. And that's at least 4 years away as the warranty extends to 2022 for us.